Lease or Purchase a 2023 Model Y SR/LR in Virginia?

[ikillratz]

I am looking to purchase or lease a standard or long-range Model Y. I know I don't qualify for the tax credit so that isn't a concern. What are my chances in 3 years that the 2023 Model Y (any version) will have trade equity in it? I have only leased cars for the last couple of years and due to the pandemic I had equity in my leases early and traded them all in early on newer leases and got lower and lower payments each time.

Sorta on a side note, is the LR worth the $3K price over the SR right now? I will take long trips in it once in a while but not all the time. There are plenty of superchargers on my route that either car will work fine actually. Is there a ride quality difference between them? I was on another forum and people were complaining about the ride quality in the Y.

 

[jjrandorin]

I am looking to purchase or lease a standard or long-range Model Y. I know I don't qualify for the tax credit so that isn't a concern. What are my chances in 3 years that the 2023 Model Y (any version) will have trade equity in it?

Pretty slim, since tesla has not backed off on the "you cant buy out your lease at all" stance on model 3/Y. Perhaps you are not aware of this, but model 3/Y have NO purchase provision on them at the end of the lease. You cant buy it even if you want to. You cant currently sell it to a dealer, nor can you trade it in on another car at another dealer if its a lease.

It is VERY MUCH an "apartment you rent". Its not anything else but a rental, so if you are even thinking about things like "equity in a lease" you need to re calibrate that on a tesla model 3/Y to say you WILL be turning it into tesla at the end, regardless of whether you want to or not, unless they change their current stance which they have not since model 3 leases have been available in 2019.

 

[ewoodrick]

Whether to lease or buy is up to you. But simply put, you tend to pay more when leasing than buying. The leasing company has got to make some money.
And when you turn the car in or sale it, well, it should be close to the same value.
There absolutely will be trade equity in the car. So far Tesla's have been holding their value quite well.

Is the LR worth more than the SR? It depends. To a great degree, anywhere the LR can go, the SR can go.
The reality shows up in the winter when you can expect about a 30% degradation in range (it will come back in spring) and you charge to let's say 90% (depending on which battery technology that you get), and let it drop to maybe 10%, then that's only 70% of the battery, In any case, you really aren't comparing the posted max ranges.
How long do you commute each day? If it's a one-way commute of over 100 miles, then the SR may get iffy.

 

[ikillratz]

Pretty slim, since tesla has not backed off on the "you cant buy out your lease at all" stance on model 3/Y. Perhaps you are not aware of this, but model 3/Y have NO purchase provision on them at the end of the lease. You cant buy it even if you want to. You cant currently sell it to a dealer, nor can you trade it in on another car at another dealer if its a lease.

It is VERY MUCH an "apartment you rent". Its not anything else but a rental, so if you are even thinking about things like "equity in a lease" you need to re calibrate that on a tesla model 3/Y to say you WILL be turning it into tesla at the end, regardless of whether you want to or not, unless they change their current stance which they have not since model 3 leases have been available in 2019.

I meant what are the chances in 3 years I will have equity in general. I know I can't trade the lease in on a new Tesla and use the equity as a trade in value but if there is equity it might be better to purchase than lease. That is what I am trying to get at. If there is a good chance there is some equity in the Tesla Model Y in 3 years then it might push me to finance instead of leasing since I generally trade in my cars at 3 years or less according to the last 20 years or so of my car ownership.

 

[ikillratz]

Whether to lease or buy is up to you. But simply put, you tend to pay more when leasing than buying. The leasing company has got to make some money.
And when you turn the car in or sale it, well, it should be close to the same value.
There absolutely will be trade equity in the car. So far Tesla's have been holding their value quite well.

Is the LR worth more than the SR? It depends. To a great degree, anywhere the LR can go, the SR can go.
The reality shows up in the winter when you can expect about a 30% degradation in range (it will come back in spring) and you charge to let's say 90% (depending on which battery technology that you get), and let it drop to maybe 10%, then that's only 70% of the battery, In any case, you really aren't comparing the posted max ranges.
How long do you commute each day? If it's a one-way commute of over 100 miles, then the SR may get iffy.

I work from home so no work commute. I am doing fine in a Niro EV right now that has a range of 250 or less. Sometimes the range on the Niro says 270+ but that is based on efficiency calculations. I doubt I actually would get that. I never tested it though. I keep the Niro at around 75% - 100% probably 90%+ of the time since it can charge at home on a trickle charge all day/night and I have no commute. When we take it out of town we can get it down to liek 50 miles or something but a vast majority of the time the milage reads 200+ on my Niro currently.

Is there any difference between the SR and LR besides the range and acceleration?

 

[ATPMSD]

For many people, leasing makes sense. For the sake of argument let’s assume you are one of those. The problem with a Tesla lease is the money factor is awful! The amount you save on a monthly basis does not make leasing from Tesla worthwhile.

 

[jjrandorin]

I meant what are the chances in 3 years I will have equity in general. I know I can't trade the lease in on a new Tesla and use the equity as a trade in value but if there is equity it might be better to purchase than lease. That is what I am trying to get at. If there is a good chance there is some equity in the Tesla Model Y in 3 years then it might push me to finance instead of leasing since I generally trade in my cars at 3 years or less according to the last 20 years or so of my car ownership.

If you mean "If I finance the car, I intend to pay the limited amount of drive offs that I can, and intend to wrap everything into the loan, what is the chance this car will not be underwater in 3 years?" no one knows. Tesla will change pricing on new vehicles to spur demand. No one can even attempt to accurately speculate, because of what I just said.

If you know 100% that you will want to get out of the car in 3 years, perhaps a lease would be better for you. I leased BMWs for 20 years before I bought my model 3 in 2018 since I decided I was getting a bit older, and no longer felt I would "need" to get a new car every 3 years. I am still happy with my model 3 after 5 years which never really happened with any other vehicle I had.

If you know for a fact you will want to get out of the car in 3 years (and not 1 year, or 2 years and 3 months, or 3 years and 8 months) then perhaps you should lease it.

 

[ikillratz]

For many people, leasing makes sense. For the sake of argument let’s assume you are one of those. The problem with a Tesla lease is the money factor is awful! The amount you save on a monthly basis does not make leasing from Tesla worthwhile.

I made a spreadsheet based on 3 years between financing and leasing. Maybe my numbers are wrong but even if I purchase the Tesla and then trade it in at 3 years I am still out of pocket more than if I just leased it and returned it back to Tesla. I only did 3 years for the finance also to match the lease terms. It seem once you take into account the down payments, the monthly payments, lease disposition fee, and trade value estimation the lease still comes out a head a little. Is my math/thinking wrong? I used this site to get the depreciation and trade value estimates Tesla Model Y Depreciation

 

[ATPMSD]

I made a spreadsheet based on 3 years between financing and leasing. Maybe my numbers are wrong but even if I purchase the Tesla and then trade it in at 3 years I am still out of pocket more than if I just leased it and returned it back to Tesla. I only did 3 years for the finance also to match the lease terms. It seem once you take into account the down payments, the monthly payments, lease disposition fee, and trade value estimation the lease still comes out a head a little. Is my math/thinking wrong? I used this site to get the depreciation and trade value estimates Tesla Model Y Depreciation

The value of the car after 3-years on a loan is closer to $23,000. Saving just $150 / month is not much. If you lease you must turn in the car and pay excess mileage and wear chargers. If you own it, you can sell it after three years, or keep it longer - you have options.

BTW, the Tesla lease turn in process is not typical. In most case a 3rd party does an inspection and excess changers are agree too. With Tesla you turn in the car, they look at it, then send you a Bill, there is no neutral 3rd party.

 

[ewoodrick]

I'm looking at Tesla's site right now at 2020 models, while dealer resale is definite high than dealer purchase, 2020 Model Ys are all above $45,000. Private sell should be higher than that.

 

[ewoodrick]

I work from home so no work commute. I am doing fine in a Niro EV right now that has a range of 250 or less. Sometimes the range on the Niro says 270+ but that is based on efficiency calculations. I doubt I actually would get that. I never tested it though. I keep the Niro at around 75% - 100% probably 90%+ of the time since it can charge at home on a trickle charge all day/night and I have no commute. When we take it out of town we can get it down to liek 50 miles or something but a vast majority of the time the milage reads 200+ on my Niro currently.

Is there any difference between the SR and LR besides the range and acceleration?

I don't think so, and the acceleration difference is non-existent for most people

 

[ewoodrick]

Pretty slim, since tesla has not backed off on the "you cant buy out your lease at all" stance on model 3/Y. Perhaps you are not aware of this, but model 3/Y have NO purchase provision on them at the end of the lease. You cant buy it even if you want to. You cant currently sell it to a dealer, nor can you trade it in on another car at another dealer if its a lease.

It is VERY MUCH an "apartment you rent". Its not anything else but a rental, so if you are even thinking about things like "equity in a lease" you need to re calibrate that on a tesla model 3/Y to say you WILL be turning it into tesla at the end, regardless of whether you want to or not, unless they change their current stance which they have not since model 3 leases have been available in 2019.

That's what I did a little research on. While I couldn't find the "you can't buy out the lease" I couldn't fine anything that said you could.

So this is definitely buyer beware, because indeed a few years ago Tesla said you could not buy out the lease.

 

[ikillratz]

The value of the car after 3-years on a loan is closer to $23,000. Saving just $150 / month is not much. If you lease you must turn in the car and pay excess mileage and wear chargers. If you own it, you can sell it after three years, or keep it longer - you have options.

BTW, the Tesla lease turn in process is not typical. In most case a 3rd party does an inspection and excess changers are agree too. With Tesla you turn in the car, they look at it, then send you a Bill, there is no neutral 3rd party.

When you say "value" you mean resale value? Is Tesla harsh in the lease return process on wear?

 

[ikillratz]

That's what I did a little research on. While I couldn't find the "you can't buy out the lease" I couldn't fine anything that said you could.

So this is definitely buyer beware, because indeed a few years ago Tesla said you could not buy out the lease.

I have found multiple places online saying you get trade in your lease or buy it out. So if I do the lease I am completely expecting to just keep it for 3 years, return it, and get a new one.

Just have to see if at the end of 3 years it would save money to purchase the car then trade it in and get a new Tesla. Have to weigh the higher monthly payment with the estimated trade equity to see if it comes out better then the lease.

 

[ATPMSD]

When you say "value" you mean resale value

No, in this case I am referring to the loan payoff amount. If the market value is greater you can sell the car at a profit.

Tesla harsh in the lease return process on wear?

Posting I have seen have not been good, but to be fair people do not post good experiences. The issue is there is no 3rd party to ensure fairness.

 

[ewoodrick]

I have found multiple places online saying you get trade in your lease or buy it out. So if I do the lease I am completely expecting to just keep it for 3 years, return it, and get a new one.

Just have to see if at the end of 3 years it would save money to purchase the car then trade it in and get a new Tesla. Have to weigh the higher monthly payment with the estimated trade equity to see if it comes out better then the lease.

Are you thinking about paying for Enhanced AutoPilot or FSD? If so, rerun your numbers just for these. Realize that resale will vary from a car with vs without them.